City plans incentives for downtown homes

Published 9:58 pm, Wednesday, August 15, 2012

In an effort to get more people living downtown, the city of Houston is pitching a plan that would offer financial incentives for residential development on the eastern part of the Central Business District.

Developers who qualify for the new Downtown Living Initiative could receive up to $15,000 for each unit they build in a multifamily complex of at least 10 units.

"Our overall goal is to get rooftops in downtown Houston," said Andy Icken, the city's chief economic development officer. "The benefit is more people living downtown, which has a multiplier effect to the city."

The proposal was on the City Council agenda Wednesday, but it was tagged for consideration later.

Also on Wednesday, the council approved a plan to abandon and grant a portion of Prairie Street across from Minute Maid Park, allowing developer Marvy Finger to build 380 upscale apartments there. An outside appraiser valued the portion of the street at about $2 million, Icken said.

The overall downtown development initiative comprises an area near the George R. Brown Convention Center bordered by Runnells Street on the north, Chartres on the east, Pierce on the south and Fannin on the west.

In order to qualify for the financial incentives, developers would have to build within the specified zone and meet design guidelines focused on the project's street presence.

That would include adding ground-level shops or space for related uses.

'Sidewalk-friendly'

"We want those designs to be street-friendly, sidewalk-friendly - a way that encourages a walkable environment," Icken said.

Once projects are built, developers would be reimbursed over time from the taxes their projects generate.

Roughly two-thirds of the reimbursement would come from the city and the remainder from the Downtown Houston Management District.

The program would run for four years and cap out at 2,500 units.

In addition to bringing more activity near the convention center, the program would help address the higher costs associated with building downtown, Icken said.

Land prices in the city center are higher than other parts of Houston, he said, and developers face additional costs related to building on an urban street grid.

Needing an incentive

The new initiative represents a "but for" program, meaning the projects may not get built but for the city incentive, Icken said.

"This gets jobs and investment in the city of Houston and downtown," he said.